Minimum-wage law has ‘gray areas’
December 9, 2006
Problems with the new minimum-wage hike that went into effect Nov. 28 may only be settled in court or through further legislation, the state labor commissioner said.
State Labor Commissioner Michael Tanchek said Friday that the minimum-wage law approved in the November election is “the supreme will of the people of Nevada,” and it can only be altered by another constitutional amendment or further interpreted by judges.
“I anticipate that we’ll see some of these questions in court,” he said at a workshop in the Legislative Building. “I look forward to it because then we’ll have an answer.”
There’s a lot that needs to be fixed, according to employers who attended the four-hour workshop Friday. Most took issue with the “qualified health plan” exception, and with the fewer number of workers who are exempt under the new law.
The state minimum wage increased from $5.15 an hour to $6.15 an hour for minimum-wage earners who are not offered a qualified health insurance plan by their employers.
“It was evident to me that there are many gray areas on the new minimum-wage constitutional amendment that need to be clarified,” said Ronni Hannaman, executive director of the Carson City Area Chamber of Commerce. “Even the Labor Commissioner and attorneys were not able to determine how to interpret some of those gray areas. The bottom line is that all employers must comply with the emergency regulations immediately and wait for further clarification, especially in the area of health insurance.”
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The amendment sets up a two-tiered minimum-wage system. Employers who offer a qualified health insurance plan to their minimum-wage employees can continue to pay $5.15 an hour, whether or not employees take the health plan. Employers who don’t offer a qualified plan will have to pay at least $6.15 an hour.
That issue caused the most confusion in the packed conference room.
A qualified plan means that employees and their dependents are covered at a cost to the employee that does not exceed 10 percent of the employee’s gross taxable income, Tanchek said.
Employers questioned if the plan must include prescription drug benefits, but the labor commissioner said that is not described in the law.
A lawyer who drafted the amendment said it is a law to increase minimum wage, not press for medical coverage. The medical coverage is only an option employers can take.
An option many may take, said Liz Karger, an account service coordinator with Anthem Blue Cross and Blue Shield. She said employers may opt to offer the health plan because it will end up costing less than increasing wages for all their employees.
Karger said if the employer can find a plan that costs under $240 a month – more likely for individual coverage – it will cost the employer less to offer the plan than to raise the salary of a $6-per-hour employee.
“The company will opt for insurance rather than paying the higher wage,” she said.
• Contact reporter Becky Bosshart at email@example.com or 881-1212.
The minimum-wage hike
Who is exempt?
• The only exemption is for those under the age of 18 who are employed by a nonprofit organization for the summer or after school, or employed as trainees for less than 90 days.
• That means domestic-service employees, outside salespersons, agricultural workers, taxicab and limousine drivers, casual baby sitters and severely disabled persons with state employment certificates are no longer exempt from the minimum-wage law.
• Employees who are offered a health insurance plan by their employer will be entitled to daily overtime (hours worked more than eight) if they make less than $7.73 an hour.
Employees who are not offered a health plan will have to be paid daily overtime if their hourly rate is less than $9.23 an hour.
Current Nevada law requires employers to pay overtime for more than 40 hours worked in a week. Daily overtime is only paid to those who make $7.73 an hour or less.
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